October

Canaccord Genuity advises Park Resorts on debt restructuring

On 7 October 2009, our client Park Resorts announced the successful completion of its debt restructuring. Park Resorts is the second largest owner and operator of holiday parks in the United Kingdom in terms of revenue and number of pitches.

Following the acquisition by GI Partners in March 2007, EBITDA fell significantly due to the deteriorating wider economic environment and operational changes made by a new management team introduced post acquisition which meant that a restructuring of the Group's indebtedness was required. In this context, Canaccord Genuity was initially appointed as adviser to the Group.

GI Partners decided to remove the senior management team and bring back the former management team who had been in place at the time of GI Partners’' acquisition of Park Resorts. The incoming management team swiftly made a number of substantial changes to the way the business was run which had an immediate impact and provided both GI Partners and the banks with confidence that a substantial improvement in EBITDA could be achieved in coming years.

Canaccord Genuity formulated a proposal whereby the face value of the debt was retained and the sponsor (although not injecting new money) retained almost all of its equity with the banks receiving a 5% stake. Critically, this gave the sponsor control over an exit which ensures that there is the prospect of longer term value recovery if the Group continues to perform in line with its business plan. The Group's liquidity constraints were alleviated by provision of new money from the banks in the form of a new super senior revolving facility which was made available to fund interest payments and an amortisation holiday.